Bona fide tax dispute bars interest on alleged admitted tax where liability was contested from the outset.

Interest could not be levied where the assessee had bona fide disputed its liability to tax on brass idols sold as art brassware, because the amount did not constitute admitted tax under section 8(1) of the U.P. Trade Tax Act. As the tax liability was contested from the outset, the statutory basis for charging interest was absent. The Tribunal was therefore justified in deleting the interest, and that deletion was upheld.

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Issues: Whether interest could be levied when the assessee had bona fide disputed its liability to tax on the sale of brass idols and the amount could not be treated as admitted tax under section 8(1) of the U.P. Trade Tax Act.

Analysis: The assessee had disputed its tax liability from the beginning in respect of brass idols sold as art brassware. In such circumstances, the tax could not be regarded as admitted tax within the meaning of section 8(1) of the U.P. Trade Tax Act. Since the liability itself was bona fide contested, the basis for charging interest was absent, and the Tribunal was justified in deleting the levy of interest.

Conclusion: The deletion of interest was upheld and the revision failed.

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